Identity Theft & Fraud Crackdowns A Boon For Arizona Underground Economy

Very long and interesting article in the Tuscon Citizen about the unitended consequenses of the 2007 law that heavily penalized employers who hired illegal immigrants. The net result is a booming cash economy for these workers, and ultimately less tax revenue and workplace oversight by the state and federal governments.

The 2007 law that increased employer sanctions for worker immigration status likely did reduce the amount of identity theft and criminal impersonation charges statewide. Prior to that it was widely believed that many employers looked the other way, or merely didn’t dig very hard when workers presented questionable social security cards or other documentation for employment.

But at least with fake or borrowed social security numbers, payroll taxes are deducted and paid. Not so with the underground economy of cash laborers or underground sales that now take place.

No one really believes that these displaced illegal workers actually left the country. They just started doing more underground work that is harder to track, regulate, and lives in the shadows of the regular economy.

Politicians, policy advocates and citizens alike will have to decide for themselves whether this is really an improvement of the situation, or solves any real problem with the immigration mess in Arizona and nationwide.

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